Facebook proposes new settlement in sponsored story class action

October 24, 2012 by

Facebook, Inc. has proposed a revised $20 million settlement in a class action lawsuit accusing it of violating the rights of users through its “Sponsored Stories” advertising feature after a U.S. judge rejected an earlier accord.

The new settlement agreement, filed in early October, in U.S. District Court in San Francisco, drops provisions setting aside up to $10 million to be given to charity and allows users to apply for a cash payment of up to $10 each.

U.S. District Judge Richard Seeborg rejected an initial settlement proposal on August 17 after questioning why the agreement provided no cash for Facebook users.

The initial agreement provided no money to class members and instead set aside $10 million to be given to charities involved in Internet privacy issues.  The new agreement, which is also subject to Seeborg’s approval, allows for some of the funds to go to charity, but only if there is any left after users’ claims, attorneys fees and other expenses are met.

But given the size of the class, the charities might still get some cash. The agreement provides that, if it is not economically feasible to pay all the users a cut, the court may designate the entire fund as going to the charities.

The proposed settlement covers nearly 125 million people, court documents show. The $20 million equates to less than 2 cents per class member.

Steve Larson
An experienced trial lawyer who handles both hourly and contingent fee cases, Steve has expertise in class actions, consumer cases, antitrust litigation, securities litigation, corporate disputes, intellectual property disputes, unfair competition claims, employment matters, and disputes involving family wealth. Steve regularly represents individuals and businesses in federal and state court and has obtained class-wide recovery in multiple class actions. A veteran practitioner, Steve's clients value his creative approach to resolving complex litigation matters.

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